The country has large coal reserves (about 50 billion metric tons). The Mongolian thermal power generation capacity consists of seven coal-fired combined heat and power generation plants and numerous diesel power stations, which are mostly located at off-grid province and village centers. In Mongolia, the primary commercial energy resources are indigenous coal and imported petroleum products. Coal is used for generating electricity and heat; petroleum products are used mainly for transportation and electricity generation in isolated systems. Renewable Energy Resource Mongolia has vast resources of renewable energy and has favorable climatic and weather conditions for effective use of these resources. 1. There are exists 3800 small and big streams and rivers in our country, which could support 6417.7 megawatts of power and deliver 56.2 billion kilowatt/hours of electric energy in a year. 2. From 270 to 300 days in average year on entire territory of the country are estimated as sunny and yearly average daylight time is estimated as 2250-3300 hours. The yearly radiation is estimated as 1200-1600 kilowatts per square meter and its intensity is estimated as more than 4.3-4.7 kilowatt per hour. 3. As it pointed out in wind energy atlas of Mongolia, the 10 percent of the total territory or 160 thousand square kilometer area is estimated as suitable for wind energy application. It is estimated that 13 aimags have more than 20,000 megawatts of wind potential, and 9 aimags have more than 50,000 megawatts of wind potential, and Omnogobi aimag alone has wind energy potential of over 300,000 megawatts. 4. There are over 40 indications of geothermal manifestations on the territory of Mongolia and from these sites Tsenkher, Khujirt and Shargaljuut, located in the Khangai region, may be used for energy production purposes. Barriers to the increase the use of renewable energy in Mongolia. Incomplete assessment of renewable resources: The current renewable resources assessment is inadequate, particularly for data on wind regimes and solar insulation levels in the country are weak. Where data do exist, they bare often gathered by meteorological offices on an infrequent basis at locations not necessarily suitable for wind or solar applications. Weak institutional structure for market-based renewable energy development: Three Ministries such as the MI, MAF, MNE responsible for overseeing renewable energy and their agencies, as well as several research institutions and some private enterprises in Mongolia working on the development of renewable energy projects. In the absence of leading institution to facilitate information exchange and promote common policies and methodologies. Lack of business skills: Few business professionals familiar with several renewable energy technologies have any more than importing renewable energy technology, commercial enterprise operation. Those with the technical skills have little understanding about how to use those technical skills in a private sector setting.
Lack of facilities for testing and certifying equipment; In Mongolia, early enthusiasts who installed renewable energy facilities found that the equipment did not live up to expectations. The small companies producing renewable energy products that were not making use of the experience. As a result, there has been some public skepticism about the viability of renewable energy system High cost of renewable energy systems: Although they have generally low recurring costs, most renewable energy systems have a high up-front cost. While some renewable energy sources can provide energy at a cost which is competitive with conventional energy sources, others are still not competitive Lack of suitable funding mechanisms: Individual households and small communities in remote locations, who are most likely to benefit from the short-term gains of renewable energy, are frequently unable to pay the up-front costs for such projects. Lack of technical knowledge and information to develop advanced and more appropriate system in Mongolia and lack of financial resources to conduct researches on geographically suitable technology and system. Lack of Management(lack of finance, technology, and management capacity at the soum level to run and maintain the renewable energy system, lack of service and spare parts for renewable energy system in the rural areas) Lack of Information including market information (where to get and how much it costs) to the consumer and lackof credit and barter schemes to purchasethe system by herders and soum centers, lack of credit for the producer of the system